Economy

Natural Gas Price Update: Markets Experience a Minor Retreat

Published

October 4, 2023

Natural Gas Price Update: Markets Experience a Minor Retreat

Natural gas price has pulled back just a bit during the trading session on Monday as we continue to see a lot of noise around the $3.00 level. The $3.00 level is a large, round, psychologically significant figure that has offered massive resistance all summer long. That being said, it certainly looks as if we will eventually have to sort something out as to whether or not we can break out. Quite frankly, I think natural gas eventually will, and once it does, we will go looking to the 200-day EMA. If we break above that level, then it opens up a move all the way to the $5.00 level. Because of this, the market is going to have a lot of FOMO if we get toward that region.

Factors Influencing Natural Gas Prices

That doesn’t mean that it happens right away, and it doesn’t mean that it happens very easily. After all, natural gas markets do tend to move on short-term weather patterns. However, there are some longer-term things coming into the picture this year. For example, this is a market that has to deal with the idea that the Europeans are going to struggle to find enough natural gas this year as Russia is offline to the EU. Surely, the situation in West Africa will offer some problems for the Europeans as well. Africa will be cut off the natural gas supplies to some extent or the other.

Critical Support Levels

The 50-Day EMA underneath should continue to offer support, so if we were to break down below there, then we could see quite a bit of negativity down to the $2.50 level, which is an area that has a lot of support. Anything below there would certainly be a very negative sign for the market, and at that point in time, it would be possible for the market to drop all the way down to the $2.00 level. We turn around and go to the upside, if for no other reason than the cyclical aspect of this market.

Southeast Asia: The Future Epicenter of LNG Demand

Shifting Global LNG Trade Dynamics

Trade in global liquefied natural gas rose to a record in 2022, fueled largely by a surge in demand from Europe as the region moves away from relying on the advantages of natural gas pipelines from Russia following Moscow’s invasion of Ukraine. However, Europe’s demand for LNG is expected to recede in a few years.

Vietnam: A Bright Spot in LNG Fast Gas

Vietnam is a bright spot for the LNG market, said Regan forecasting strong growth in demand from the country over the next few years. Largely because of the government’s Power Development Plan 8. The plan stipulates that all coal plants must be converted to alternative fuels or retired by 2050.

Impact on Southeast Asia’s Economic Landscape

Vietnam has long been in the position of an important LNG growth market due to its “strong economic and population growth,” said Columbia University’s Center on Global Energy Policy. That growth might as well spearhead the demand for energy.

Prospects for the Global LNG Market The global

The LNG market is projected to grow from $74.60 billion in 2023 to $103.41 billion by 2028, according to forecasts by analysis and consulting firm Mordor Intelligence.

Gas Investing: Shell’s Insight on LNG Markets

Energy giant Shell emphasised the “tremendous growth” in the LNG market in the last two months. Besides, the company highlighted three countries that will be pivotal drivers, two of which are from Southeast Asia.